2004 (9) TMI 607 - HC - VAT and Sales Tax

Summary

Issues:
Constitutional validity of section 45B of the Kerala General Sales Tax Act, 1963 - Levy of penalty on transporting agencies for goods without prescribed documents - Detention of vehicles for repeated offences - Challenge against penalty provision - Double penalty for the same transaction - Detention of vehicle for 30 days for repeated offence.

Analysis:

1. Constitutional Validity of Section 45B:
The petitioners challenged the constitutional validity of section 45B, arguing that transporters, not engaged in buying or selling goods, should not be penalized for sales tax evasion. They contended that the State Legislature lacked authority to enact section 45B under entry 54 of the State List, affecting public carriers governed by Parliamentary law. However, the court referred to Supreme Court decisions upholding penalty provisions on transport to prevent tax evasion, within the State's legislative competence. The court found no inconsistency between section 45B and existing laws on bailment and carriage of goods, dismissing the challenge against the provision's constitutionality.

2. Penalty Provision and Double Penalty:
The petitioners raised concerns about the levy of penalty under section 45B in addition to penalties under section 29A for the same goods, leading to double penalties. The court noted that while the transporter could face penalties under section 45B, the department could still penalize the actual owner under section 29A. The discretionary nature of penalties under section 45B allowed for adjustments if penalties were imposed on the owner, thus rejecting the petitioners' contention against the provision.

3. Detention of Vehicles for Repeated Offences:
The petitioners contested the provision for detaining vehicles for 30 days for repeated offences under section 45B. The court emphasized that the legislative intent was to prevent tax evasion, justifying the deterrent punishment for repeated offences. It deemed the provision for higher penalties in such cases as not arbitrary or illegal, supporting the State's objective to curb tax evasion effectively.

In conclusion, the court dismissed the original petitions and writ petition, finding them devoid of merit. The petitioners were granted three weeks to challenge penalty orders before the statutory authority. The court upheld the validity of section 45B, emphasizing its role in preventing tax evasion and deterring repeated offences for transporting goods without prescribed documents.